It’s too early to deserve comparisons to the re-fi mania of the early 2000s, but mortgage refinancing surged over the past week at some southeast Wisconsin banks and mortgage lenders.

The cause is low interest rates in the 5.5 percent range for a 30-year fixed-rate mortgage as of Dec. 3.

Executives with several banks said they’ve seen a jump in activity starting the day before Thanksgiving. Bank executives believe the activity level may be more sustainable than short-lived re-fi upticks earlier this year, when rates dipped briefly only to return to more than 6 percent.

The mortgage lending staffs at many banks are busy calling existing mortgage customers and prospects who have asked them to call when rates decrease.

At the same time, many consumers are calling banks unsolicited to get rates and apply for refinancing, bank executives said.

“This is mainly people coming to us, to be quite honest,” said Steve Schowalter, president and CEO of Port Washington State Bank.

Schowalter said his bank went from eight to 42 refinancings pending in the past week.

The increase in mortgage refinancing during the usually sleepy month of December is providing a dose of good news for banks — and possibly the economy — as 2008 draws to a close.

More money in consumers’ pockets could spur spending. Low rates also could encourage more first-time home buyers to enter the market, bank executives said.

Doug Levy, president and CEO of Guaranty Bank in Brown Deer, said he hasn’t seen this type of activity since the early 2000s when some homeowners completed multiple refinancings to capitalize on ever-lower rates. Guaranty Bank, which recorded a net loss of $21.4 million in the third quarter, does the overwhelming majority of its lending for mortgages.

“It’s really positive for the economy,” Levy said. “If people are able to lower their payments, they have cash in their pockets to spend.”

The impact of low rates on the housing market likely will be limited to first-time home buyers who don’t need to sell their existing homes in the depressed market, bank executives said. The rates are causing some buyers to climb off the fence.

“Home buyers are back in the markets, if they have good credit and jobs,” Lipman said.

The refinancing activity here follows national trends.

The Washington, D.C.-based Mortgage Bankers Association said that when interest rates plummeted to a three-year low on Nov. 26, many people who have been “on the sidelines decided to quickly jump in and take advantage of lower rates before they began to rebound.” The association said Dec. 3 its refinance index increased 203.3 percent from the previous week.

The refinance share of mortgage activity increased to 69.1 percent of total applications from 49.3 percent the previous week, the association said. The average interest rate for 30-year fixed-rate mortgages decreased to 5.47 percent from 5.99 percent.

Lower prime rate

Mortgage rates are down due to the prime rate’s historically low level and the Federal Reserve’s announcement last week that it is buying debt from mortgage-buying giants Fannie Mae and Freddie Mac.

Mortgagebot LLC, a Mequon firm that handles online mortgage originations, this week experienced the seventh-highest number of interest rate searches in its 10-year history, said CEO Scott Happ. Searching rates is the first thing most homeowners do when they’re considering a refinancing, Happ said.

Mortgagebot’s clients are 750 financial institutions ranging from small community banks and credit unions to national bank Citibank and Wisconsin regional powerhouse M&I Marshall & Ilsley.

Transaction volumes are the highest since April, but Happ stopped short of calling the recent trend a re-fi frenzy.

“It is back, but everything is so squirrelly these days,” Happ said. “As long as rates stay about 5.5 percent or lower, the re-fi business will sustain at a higher level.”

To be sure, the surge is not universal or certain to last.

Russ Weyers, president of Racine-based Johnson Bank, said refinancing activity should be significant given the low interest rates, but his bank hasn’t seen much of an uptick.

“That makes me a little nervous that the consumer is so nervous that they don’t even want to refinance to improve their situation,” Weyers said.

Schowalter of Port Washington State Bank warned that there’s no guarantee rates will remain this low for long. He noted that this is the “fourth or fifth” time rates fell this year and that could change as quickly as they materialized.